The simple approach focuses on buying the 10 highest-yielding stocks in the Dow Jones Industrial Average at the beginning of each year and holding them for 12 months. Historically, the strategy has generated competitive returns, strong dividend income, and downside protection during volatile markets. 

After another solid showing in 2025, the Dogs of the Dow are once again proving their value in 2026, with several of this year’s top-yielding Dow components already posting impressive gains. Here’s a closer look at how the strategy performed last year, how it’s doing so far in 2026, and why income-focused investors continue to rely on this time-tested investing approach.

How the Dogs of the Dow Performed in 2025

For 2025, here’s how the Dogs of the Dow did.

• Verizon (NYSE: VZ) started 2025 at around $38. It ended the year at $39.44.
• Chevron (NYSE: CVX) from about $142 to $149.56.
• Johnson & Johnson (NYSE: JNJ) ran from $142 to $204.68.
• Amgen (NYSE: AMGN) ran from about $258 to $322.62.
• Merck (NYSE: MRK) ran from about $98 to $103.74.
• Coca-Cola (NYSE: KO) jumped from $61 to $68.99.
• IBM (NYSE: IBM) ran from about $215 to a $292.38.
• Cisco (NYSE: CSCO) ran from about $58 to $76.21.
• McDonald’s (NYSE: MCD) ran from about $293 to $301.88.
• Procter & Gamble (NYSE: PG) fell from about $264 to $141.24

That’s not bad at all.

Plus, once you factor in the yields for each, the Dogs outperformed the Dow Jones.

Dogs of the Dow Off to Strong Start in 2026

As for 2026, here’s how the Dogs of the Dow have performed to date.

• Verizon (VZ), which yields 6.51%, ran from $39.48 to a current price of $43.52.
• Chevron (CVX), which yields 4.2%, ran from $149.32 to $169.15.
• Merck (MRK), which yields 2.64%, ran from about $104.01 to $128.88.
• Procter & Gamble (PG), which yields 2.95%, ran from $141.04 to $147.81.
• Amgen (AMGN), which yields 2.8%, ran from $324.06 to $359.76.
• Coca-Cola (KO), which yields 2.57%, ran from $68.95 to $82.77.
• Nike (NYSE: NKE), which yields 3.98%, fell from $63.01 to $41.24.
• UnitedHealth (NYSE: UNH), which yields 2.22%, ran from $326.43 to $419.04.
• Home Depot (NYSE: HD), which yields 2.67%, ran from $338.61 to $348.76.
• Johnson & Johnson (JNJ), which yields 2.09%, ran from $204.55 to $256.24.

Why this Strategy Still Works

Historically, the Dogs of the Dow do very well.

The 2024 Dogs of the Dow underperformed the major indices in 2024. However, with dividends, investors still did well for the year.

The 2023 Dogs of the Dow returned an average of 10.1%, which came in below the 14.4% return on the Dow Jones’ Industrials. Still, with the appreciation in most of the 2023 Dogs coupled with dividends, investors still did well overall.

The 2022 Dogs of the Dow beat the major indices, even in a rough year.

In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%.  The S&P 500 lost 19%.  The Dow Jones lost about 9%.

In 2021, the Dogs of the Dow returned about 16.3%. While 2020 wasn’t a great year for the Dogs, most other years have done very well.  In 2019, the Dogs were up 20%.  In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%.  In 2017, the dogs were up 19%.  In 2016, they were up 16%.

The Long-Term Outlook

With several of the 2026 Dogs already delivering solid gains and continuing to pay dependable dividends, the strategy remains an appealing option for investors seeking income, stability, and long-term growth. As always, diversification and patience are key, but for those looking for a straightforward, historically successful investing strategy, the Dogs of the Dow continue to earn their place in a well-balanced portfolio.

While many investors focus on well-known blue-chip names, some overlooked dividend stocks and dividend-focused ETFs may offer even stronger upside opportunities. Companies like Lowe’s (NYSE: LOW), American States Water (NYSE: AWR), and the Vanguard Dividend Appreciation ETF (NYSEARCA: VIG) combine consistent dividend growth with solid business fundamentals, making them attractive options for income-focused investors in 2026.

Plus, it never hurts to hold dividend stocks – especially when markets get uncontrollably volatile. Not only can they help protect your portfolio, but they can also help generate healthy passive income along the way.

That being said, here are three dividend stocks you may want to consider.

Lowe’s Continues Rewarding Shareholders Despite Market Pressure 

Down, but not out, Lowe’s just raised its quarterly cash dividend to $1.25, which is payable on August 5 to shareholders of record as of July 22. That’s a 4% increase from its prior dividend payout of $1.20. 

“The momentum we are building across our strategic initiatives continues to position Lowe’s for long-term growth,” said Marvin R. Ellison, Lowe’s chairman, president and CEO, as quoted in a company press release. “Today’s dividend increase underscores the board’s confidence in the company’s trajectory, our disciplined capital allocation strategy and our commitment to delivering sustainable shareholder value.”

In addition, the company just delivered a strong Q1 2026 earnings report. The home improvement giant reported EPS of $3.03, which beat by six cents. Revenue of $23.1 billion, up 10.4% year over year, beat by $220 million. Comparable sales also climbed 0.6%, showing that demand for home improvement projects remains resilient despite ongoing pressure from high interest rates and cautious consumer spending.

American States Water Remains a Reliable Dividend King

With a yield of 2.64%, Dividend King American States Water provides water and electric services with a strong history of consistent dividend increases. In fact, it’s paid out a dividend every year since 1931. Its most recent dividend of $0.5040 will be paid out on June 2 to shareholders of record as of May 18. This is now its 360th consecutive dividend payment.

The company has grown its quarterly dividend rate at a compound annual growth rate (CAGR) of 8.5% over the last five years since the second quarter of 2021, and has achieved a 10-year CAGR of 8.3% in its calendar year dividend payments through 2025. The company’s current policy is to achieve a compound annual growth rate in the dividend of more than 7% over the long-term, as noted in its Q1 2026 earnings press release.

Why VIG Remains a Top Dividend ETF for Long-Term Investors

We can also look at ETFs such as the Vanguard Dividend Appreciation ETF, which just paid a dividend of just over 83 cents a share on March 31. Before that, it paid out just over 88 cents per share on December 24, 2025.

With an expense ratio of 0.04% and a monthly yield of 1.56%, the VIG is also an attractive opportunity that tracks the performance of the S&P U.S. Dividend Growers Index and invests in large-cap stocks with a record of dividend growth. Some of the VIG ETF’s 338 holdings include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Broadcom (NASDAQ: AVGO), JPMorgan (NYSE: JPM), Eli Lilly (NYSE: LLY), Visa (NYSE: V), Exxon Mobil (NYSE: XOM), UnitedHealth Group (NYSE: UNH), Mastercard (NYSE: MA) and Costco Wholesale (NASDAQ: COST).

Final Thoughts on Overlooked Dividend Stocks

In uncertain markets, overlooked dividend stocks like these can offer a valuable combination of income, consistency, and upside potential — making them worth a closer look for investors focused on building wealth over time. Lowe’s continues to benefit from resilient home improvement demand, American States Water offers one of the strongest dividend track records on the market, and the Vanguard Dividend Appreciation ETF provides diversified exposure to companies with a history of rewarding shareholders.

The reasons are well known and are more setbacks than any company would like to have. Primary among those concerns were:

• Allegations of fraud and misconduct related to its billing practices.
• Unexpectedly higher medical costs—particularly within its Medicare programs.
• Weak earnings results accompanied by poor forward guidance. 
• The company’s CEO abruptly resigned.

Adding to the pressure, a U.S. Senate committee investigating the company’s practices found that UnitedHealth used what it described as “aggressive tactics” to collect diagnosis data that boosted Medicare Advantage payments, according to reporting by The Wall Street Journal.

It’s tough to find a silver lining. But if investors are looking for one, it may be that much of that bad news is now priced into UNH stock.

UNH Just Signaled That Its Turnaround is Finally Here

After multiple quarters of margin deterioration and a catastrophic drop in GAAP EPS to a penny, investors got the turnaround signal they had been waiting for: a medical cost ratio that snapped back to 83.9%, and higher guidance from the company.

For its first quarter, EPS of $7.23 beat by 63 cents. Revenue of $111.72 billion, up 7.2% year over year, beat by $2.06 billion. The company also said its buying back about $2 billion of common stock by the end of the second quarter. It then raised its full-year earnings outlook to more than $18.25 per share on a non-GAAP basis, up from $17.87 expected.

Early Signs Suggest the Long-Awaited Turnaround May Finally be Underway

After several quarters of margin compression and a decline in earnings—including a period where GAAP EPS fell to just a penny—UnitedHealth delivered results that surprised to the upside. The most encouraging signal came from its medical cost ratio (MCR), a key metric that tracks the percentage of premiums spent on medical care.

The company reported an MCR of 83.9%, a notable improvement and a sign that cost pressures may be stabilizing. This metric is closely watched by investors, as even small changes can have a meaningful impact on profitability. The rebound suggests that management may be regaining control over expenses after a challenging period.

Financial performance in the most recent quarter further supported the bullish case. UnitedHealth reported first-quarter earnings per share of $7.23, beating analyst expectations by $0.63. Revenue came in at $111.72 billion, representing a 7.2% increase year over year and exceeding estimates by $2.06 billion.

Beyond the headline numbers, management also took steps to rebuild investor confidence. The company announced plans to repurchase approximately $2 billion of common stock by the end of the second quarter, signaling that it views the shares as undervalued at current levels.

Perhaps most importantly, UnitedHealth raised its full-year earnings outlook. The company now expects to generate more than $18.25 per share on a non-GAAP basis, compared to prior expectations of $17.87. The upward revision indicates growing confidence in the business outlook and suggests that recent improvements may be sustainable.

UnitedHealth Stock Outlook: Is This Turnaround Built to Last?

For investors evaluating UnitedHealth Group, the latest quarter offers a meaningful shift in the narrative. After a prolonged stretch of negative headlines and deteriorating fundamentals, the company is now showing tangible signs of stabilization. The improvement in its medical cost ratio, combined with stronger-than-expected earnings and a raised full-year outlook, suggests that management is beginning to regain operational control.

That said, this is unlikely to be a straight-line recovery. Regulatory scrutiny, particularly around Medicare Advantage practices, remains an overhang that could introduce volatility. Additionally, sustaining margin improvement will be critical, especially if healthcare utilization trends remain unpredictable.

Still, with much of the prior bad news likely priced into the stock, UNH may present an opportunity for long-term investors willing to accept some near-term uncertainty. If the company can continue executing on cost discipline and deliver consistent earnings growth, the recent momentum could mark the early stages of a more durable turnaround.

Margin Expansion Has a Hidden Price Tag

Right now, the headlines are going completely nuts over UnitedHealth Group, Inc (NYSE: UNH) figures: revenue of $111.7 billion, up roughly 2% year-over-year; adjusted EPS of $7.23; operating cash flow of $8.9 billion; and debt-to-capital of 42.9%. A profile of a business that still executes with discipline. But execution is not the story here. The method of execution is, and that distinction is where most investors stop paying attention.

UnitedHealthcare Group delivered $86.3 billion in revenue and $5.7 billion in operating income, with margins climbing to 6.6% from 6.2% and the medical cost ratio declining to 83.9% from 84.8%. On the surface, that reads like control. Clean, even. The kind of improvement that gets quoted in bull cases without further examination.

However, margins don’t expand in a regulated system without trade-offs – they are earned by choosing where not to participate as much as where to lean in. Total membership fell to 49.05 million from 50.1 million, including a reduction of roughly 965,000 Medicare Advantage members. Indicating that the company is tightening its exposure to areas where returns no longer justify the capital under current reimbursement conditions, and the margin improvement is the direct result of that exit. You cannot separate the two.

Washington’s Boogeyman strikes again

Let’s be precise about where the pressure originates, because pricing it correctly changes how you see this business going forward.

A significant portion of UnitedHealth’s revenue runs through government-backed programs – particularly Medicare Advantage – where reimbursement rates are not set by the company but determined in Washington. 

Earlier this year, initial Medicare rate proposals came in at roughly 0.09%, effectively flat, before being revised higher after sustained industry pushback. That sequence alone triggered sector-wide volatility because it exposed the underlying reality plainly: pricing power here is conditional.

When reimbursement moves, margins move with it. When reimbursement stalls, companies adjust or absorb, and UnitedHealth chose to adjust, shedding lower-return Medicare Advantage cohorts while tightening its medical cost ratio in the process. Put simply, UnitedHealth now profits under the government’s permission.

Can Optum Absorb All The Pressure?

For years, Optum was the layer that converted scale into higher-margin, diversified growth and justified a premium multiple. It still drives revenue. But the conversion is weakening, and that is a material shift in the investment thesis.

Optum Health reported $24.1 billion in revenue, down 3% year-over-year, with reported operating income of $1.141 billion and adjusted at $1.312 billion – a 5.4% margin. Optum Insight delivered $5.1 billion in revenue, but adjusted operating income dropped to $774 million. Optum Rx generated $35.7 billion in revenue, up 2%, while operating income slipped from $1.3 billion to $1.2 billion and scripts declined to 383 million from 408 million.

Yes, Revenue is holding. Earnings are compressing. Margins depend on adjustments rather than on clean operational leverage. But a growth engine in full stride does not produce these numbers. A system absorbing external pressure while trying to maintain its output does.

Patients and Volume Stood Strong, But…

Patients didn’t disappear, and neither did volume collapse. In fact, the system is still processing claims and moving members at scale. What changed is the quality of that volume – the margin attached to each dollar flowing through the business. Costs are higher. Investment remains elevated. Reimbursement is constrained. So the company does what disciplined operators do in this environment: it selects or exits where necessary, and defends where it can.

That is precisely how you get margin expansion alongside membership contraction, and revenue growth alongside earnings compression in key segments. Both outcomes are intentional, and holding them together is the only honest way to read this quarter.

What The Chart Looks Like

Just before the earnings hit, UnitedHealth Group was trading around the $300–$310 range, sitting just beneath its 50-day moving average and well below the declining 200-day, a setup that reflected hesitation

Premarket, the stock jumped over 6.8%, and that momentum carried into the session, pushing the price aggressively toward the $340–$350 zone, reclaiming both the 21-day and 50-day moving averages in one move. That kind of reclaim, in a single session, is not retail noise; it’s institutional repositioning. Volume confirms it, expanding meaningfully relative to prior sessions.

RSI pushed toward 60+, shifting out of neutral into bullish momentum without yet entering extreme overbought territory, exactly where sustained moves tend to build from.

Now, price is pressing into a prior supply zone while compressing beneath the 200-day. If that level gives way, you’re not looking at a bounce anymore but a trend transition. Signaling that the market is repricing the business’s durability under pressure, rather than its beat.

The Negotiation Is Just Getting Started

No doubt this quarter proves UnitedHealth can perform under pressure, further proving it as a good buy. What it does not prove is how much tighter conditions can get before the trade-offs migrate from segment margins and membership figures into the core numbers that investors anchor their entire thesis to. 

That is the question worth sitting with, and if you’ve been paying attention, you already know this is no longer a simple growth story, but a negotiation. One where profit still exists, but only with permission.

The Strategy Behind the Dogs of the Dow

The Dogs of the Dow strategy is made up of two distinct parts. The first is to invest, and the second is to rebalance.

Part one: Invest equal amounts into the 10 highest-dividend-yielding stocks from the Dow Jones Industrial Average. Because the Dow Jones Industrial Average is widely regarded as a benchmark of the broader U.S. stock market, its component stocks represent the entire U.S. market. Furthermore, these are blue-chip stocks that are strong enough to withstand the test of time.

Part Two: Rebalance the portfolio every year into equal amounts of the 10 highest-yielding stocks in the Dow. The rationale for doing this every year goes back to research that indicates that, over the long term, the strategy generates higher returns then buying shares of an index fund tied to the DJIA, or even the S&P 500.

It’s a deceptively easy strategy, but it requires discipline. If this strategy appeals to you, here’s a cheat sheet to help you execute this strategy in 2026.

Dogs of the Dow: 2025 and 2026

For 2025, here’s how the Dogs of the Dow are doing with just days to go.

• Verizon (NYSE: VZ), which yields 6.85%, started the year at around $38. It’s now up to $40.
• Chevron (NYSE: CVX), which yields 4.54%, ran from about $142 to $150.50.
• Johnson & Johnson (NYSE: JNJ), which yields 2.5%, ran from $142 to $207.78.
• Amgen (NASDAQ: AMGN), which yields 3.02%, ran from about $258 to $334.
• Merck (NYSE: MRK), which yields 3.19%, traded between approximately $98 and $106.45.
• Coca-Cola (NYSE: KO), which yields 2.91%, jumped from $61 to $70.11 so far.
• IBM (NYSE: IBM), which yields 2.21%, ran from about $215 to a $304.56.
• Cisco (NASDAQ: CSCO), which yields 2.1%, ran from about $58 to $78.
• McDonald’s (NYSE: MCD), which yields 2.37%, ran from about $293 to $313.
• Procter & Gamble (NYSE: PG), which yields 2.93%, fell from about $264 to $144.50.

That’s not bad at all.

Plus, once you factor in the yields for each, the Dogs of the Dow outperformed the Dow Jones.

As for 2026, while the official list isn’t out just yet, here’s what’s likely to make the list.

• Verizon (VZ), which yields 6.84%
• Chevron (CVX), which yields 4.56%
• Merck (MRK), which yields 3.2%
• Procter & Gamble (PG), which yields 2.92%
• Amgen (AMGN), which yields 3.04%
• Coca-Cola (KO), which yields 2.92%
• Nike (NYSE: NKE), which yields 2.72%
• UnitedHealth (NYSE: UNH), which yields 2.68%
• Home Depot (NYSE: HD), which yields 2.64%
• Johnson & Johnson (JNJ), which yields 2.51%

A Strategy With a Proven Track Record

Historically, the Dogs of the Dow do very well for income-oriented investors.

• The 2024 Dogs of the Dow underperformed the major indices in 2024. However, with dividends, investors still did well for the year.
• The 2023 Dogs of the Dow returned an average of 10.1%, which came in below the 14.4% return on the Dow Jones’ Industrials. Still, with the appreciation in most of the 2023 Dogs coupled with dividends, investors still did well overall.
• The 2022 Dogs of the Dow beat the major indices, even in a rough year.

In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%.  The S&P 500 lost 19%.  The Dow Jones lost about 9%.

• In 2021, the Dogs of the Dow returned about 16.3%.
• In 2019, the Dogs were up 20%. 
• In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%. 
• In 2017, the dogs were up 19%.  In 2016, they were up 16%.

While 2020 wasn’t a great year for the Dogs, it wasn’t great for a lot of stocks for obvious reasons. However, most other years, the Dogs of the Dow have performed very well. 

Should You Buy the Dogs of the Dow in 2026?

The Dogs of the Dow remains one of the simplest income strategies available to retail investors, and its track record speaks for itself. While the strategy doesn’t outperform every year, the long-term results show consistent dividend income and competitive total returns, especially during volatile market cycles. With yields still attractive and several blue-chip names likely to appear on the 2026 list, the setup for the coming year looks compelling. As always, discipline and annual rebalancing are key. For patient investors who value simplicity and dependable dividends, the Dogs of the Dow remain worth serious consideration.